European Stocks Advance Amid China Stimulus Speculation

Bankia might be active after Spain said it will inject capital into the lender as an advance on money it is is due to receive once a reorganization plan is completed in October and approved by European authorities in November. Photographer: Angel Navarrete/Bloomberg

Sept. 3 (Bloomberg) -- European stocks rose the most in a
month as an unexpected decline in Chinese manufacturing boosted
speculation the government will announce further stimulus.

The Stoxx Europe 600 Index climbed 0.8 percent to 268.47 at
the close of trading, the largest gain since Aug. 3. The
benchmark gauge has risen 15 percent from this year’s low on
June 4 amid speculation central banks will undertake further so-called quantitative easing, or QE, to support the economy.

“We are waiting anxiously for the U.S. to see whether they
are going to do QE3, to see what the European Central Bank is
going to do and what China is going to do,” Nick Maroutsos, who
oversees about $2.9 billion as managing director and co-founder
of Sydney-based Kapstream Capital, said in an interview on
Bloomberg Television. “’Tis the season for stimulus, in terms
of monetary policy as well as fiscal policy.”

The volume of shares changing hands in Stoxx 600 companies
was 35 percent lower than the 30-day average, according to data
compiled by Bloomberg. U.S. markets were closed for the Labor
Day holiday.

A Chinese government survey released on Sept. 1. showed
factory output unexpectedly shrank for the first time in nine
months in August, fueling speculation policy makers will
announce more measures to drive growth. Separate data from the
Australian Bureau of Statistics today showed retail sales fell
in July by the most in almost two years.

In the euro area, an August gauge of manufacturing based on
a survey of purchasing managers was revised to 45.1 from the
reading of 45.3 estimated earlier, Markit Economics said today.
The index has held for 13 months below 50, indicating
contraction.

Euro-region nations are this week asking investors to stake
more than 20 billion euros ($25 billion) on second-guessing the
ECB, selling the most debt in two months before the central
bank’s meeting on Sept. 6.

Debt Auctions

Spain, France, Austria and Belgium return to the market
after a monthlong pause, with Germany also selling debt. The
auctions take place before the ECB’s meeting in Frankfurt, where
President Mario Draghi may reveal details of a new bond-buying
program.

“Yet more weak manufacturing data from the euro zone was
shrugged off, as investors look toward Thursday’s ECB meeting,
when Mario Draghi is expected to unveil something impressive to
stem the euro-zone crisis,” said Yusuf Heusen, a sales trader
at IG Index in London.

A gauge of mining companies was among the biggest gainers
on the benchmark Stoxx 600, climbing 1.3 percent, as base metals
advanced on the London Metal Exchange.

Campari rallied 8 percent to 5.90 euros, the biggest gain
since October 2008. The Italian distiller said it will purchase
Lascelles deMercado in a deal worth $414.8 million to hasten its
push into overseas markets.

Rhoen-Klinikum AG sank 21 percent to 14.99 euros, the
largest drop since at least October 1998. The company said
Fresenius SE decided against reviving its takeover bid, capping
more than four months of jockeying over the top spot in the
German hospital market.